Adhesives, Sealants Bond in Growth Mode

Anticipated growth in the U.S. building construction market will bolster a demand for adhesives and sealants that should reach 9.8 billion pounds in 2017, a new market study predicts.

Paper packaging and motor vehicle applications will also help drive those gains, creating an $11.9 billion market by 2017, according to Adhesives & Sealants to 2017, a report from The Freedonia Group Inc., a Cleveland-based industry market research firm.

Associated General Contractors of America

Growth in building construction will drive sealant and adhesive demand up 2.2 percent annually in the coming years, according to the new market report.

The study analyzes the 8.8 billion-pound U.S. adhesives and sealants industry, with forecasts for 2017 and 2022 by market and product.

Natural adhesives and sealants will remain the largest product segment, while reactive and hot-melt types are expected to grow at the fastest rate, the report suggests. Moreover, solvent-based products demand is expected to do well, due in part to reformulation efforts to lower VOC (volatile organic compounds) emissions, according to Freedonia.

Construction: Fastest-Growing Market

Among adhesives and sealants markets, the fastest growth is forecast for construction, which is expected to rebound strongly from the sharp declines of the 2007-2012 period, according to an announcement on the market study.

“Construction is a particularly important outlet for sealants, which are widely used in both building and nonbuilding applications,” the report said.

The large packaging market, which accounted for nearly 60 percent of adhesives and sealants demand in 2012, will exhibit the slowest gains, hampered by weakness in the dominant paper packaging segment.

In the manufacturing and assembly market, fastest growth is expected for tapes and labels, motor vehicles, and machinery, while nonwoven disposables, furniture, and smaller volume outlets will rise at a subpar rate.

Nearly all markets, however, will see an improvement in adhesives and sealants demand from the performance of the 2007-2012 period, Freedonia predicts.

Reactive Adhesives, Sealants Advance

Accounting for nearly 40 percent of demand through 2017, natural adhesives and sealants will remain the largest product type, according to the report.

The Freedonia Group

However, natural products will also see the weakest gains going forward, as the bulk of demand consists of low-value starch adhesives used in corrugated cardboard production, a highly mature and slow-growing application, Freedonia forecasts.

The most rapid advances are expected for reactive adhesives and sealants, with a 4.2 percent annual growth rate, fueled by the rebounding manufacturing market, as well as product substitution trends toward higher-value materials, according to the firm.

Hot melts will also see healthy gains, as their amenability to fast processing speeds and their lack of volatile organic compound (VOC) emissions will deliver growth opportunities in the packaging market, the firm suggests.

Despite decades of dwindling market share to alternative formulations, solvent-based adhesives and sealants will see above-average gains in demand in the coming years, due to a turnaround in the construction sector and product reformulation efforts to lower VOC emissions, Freedonia adds.